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By Patrick Graham | LONDON
The euro EUR= retreated from 5-1/2 month highs against the dollar on Wednesday, investors cashing in gains made on the back of the first round of France's presidential elections and a market rethink on euro zone monetary policy.

Attention was also turning to U.S. President Donald Trump's promised announcement on tax cuts, supporting a reheating of the dollar-positive "Trumpflation" trades that dominated the end of last year but have waned since.

The yen - a sufferer this week from buoyant sentiment on stock markets since the French vote on Sunday - was steadier while Australia's and New Zealand's dollars both fell more than half a percent after soft Australian inflation numbers.

By 1110 GMT, the euro had fallen around a third of a percent against both the dollar and the yen, weakening to $1.0886 from a high of $1.0951 hit in early European trade.

"There has been nothing specific driving the move this morning, we just got up to the $1.0950 area and that did seem like an obvious place to take profit," said the head of currency trading with one large international bank in London, asking not to be named.

"There is also the question today of course of whether Trump will decide to do something on the tax front and how that will be taken, especially if it leaves a big gap in revenue."

Traders said the Aussie, kiwi and Canadian dollars - all of which normally gain when investors are feeling good about global growth prospects - were also still suffering from the softness in prices of a number of major commodities since February.

Gains for the euro this week have also been spurred by expectations of a change in the direction of European Central Bank policy in coming months.

But Wednesday's data, by contrast, pointed to an Australian economy still under strain from mediocre growth in China and unlikely to support higher interest rates over the next year.

"This report was the straw that broke the camelâ€™s back as investors have been betting heavily on a pick-up in inflation that would have forced the Reserve Bank of Australia to revise its dovish stance," said Arnaud Masset, an analyst with broker Swissquote.

"We believe that the U.S. dollar debasement is coming to an end and the Aussie is the first in line for the sell-off."

The Aussie fell as much as 0.6 percent to $0.7490 in morning trade in Europe, its lowest since April 12. AUD= The kiwi lost 0.7 percent to $0.6902.

U.S. officials said late on Tuesday that Trump was proposing to slash the corporate income tax rate and offer multinational businesses a steep tax break on overseas profits brought into the United States.

"Just presenting the plan doesn't mean the plan is going to be passed," said Mitul Kotecha, head of Asia macro strategy for Barclays.

"The reality is any tax changes or tax reforms or tax cuts may not take place for some time, and Congress at this point is far from being agreed on what shape or form they are going to take."